Ginners receive financing for machinery up-gradation

The cotton ginning sector has reasons to rejoice. The apex bank, State Bank of Pakistan announced that it would provide financing facilities to the cotton ginning factories to modernise their machinery. This credit facility is available only for replacing or modernizing machinery and equipment, said a spokesperson of the bank and will be effective as on date to December 31, 2010. The financing will be available for equipment and machinery sourced from domestic companies. However, credit will also be made available to purchase new generators up-to a maximum capacity of 500 KVA. The loan will be repayable within a maximum period of seven years, which includes a grace period of six months. Locally manufactured machinery using more than 80 percent imported components shall not be eligible for financing. The rate of re-finance up to 3 years would be 6 percent with bank’s spread of 2 percent and end user rate of 8 percent. Similarly over 3 years and up to 5 years the rate would be 6.50 percent with bank spread of 2.50 percent and end user’s rate of 9 percent. Over 5 years and up to 7 years rate would be 7 percent with bank spread of 3 percent and end user’s rate of 10 percent. Financing rates will be subject to revision on yearly basis effective from July each year.

Customs duty on imported textile machinery withdrawn

The Federal Minister for Finance Senator Mr. Shaukat Tareen took a decision to withdraw customs duty on import of textile machinery and equipment. Mr. Muhammad Mansha Churra, Acting President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) lauded this decision, as zero-rated duty on import of textile machinery was the major demand of Pakistan textile industry. The industry has been facing several problems, such as steep fall in exports of textile products and expansion in the sector has totally halted to a stop.

Pakistan : Leather product exports drop 63%

In January 2007, exports of leather garments, leather gloves and leather footwear declined by 63.34 percent compared to previous month.

During this period, exports volume and value of leather garments decreased by 61.25 percent and 58.02 percent, respectively.

Total exports of the leather manufacturers reached about US $20.697 million over $40.419 million in December last year.

Exporter shipped leather garment worth $16.295 million in January 2007 over $33.389 million in December 2006.

Similarly, exports of leather gloves stood at $3.909 million over $4.944 million in December 2006, a decline of 70.73 percent in respect of quantity and 71.77 percent in term of value.

Even total exports of other leather manufacturers also declined as it reached $0.493 million as against $2.086 million in December 2006.

Exports of footwear also fell by 23.53 percent in same period as total exports stood at $6.127 million over $6.127 million in previous month.

Pakistan : PHMA asks to restrict cotton yarn exports

Jawaid Bilwani, Chairman of Pakistan Hosiery Manufactures Associations (PHMA) has requested Government to restrict export of cotton yarn to increase exports of apparel.

High exports of cotton yarn adversely affect production of value added apparel as it is main component required to make apparel, informed Jawaid Bilwani.

Value added apparels earn more foreign exchange than the cotton yarn exports and therefore, more emphasize has been given on apparel exports.

Pakistan : Knitwear exports have upper hand over Chinese quotas

Knitwear exporters of Pakistan draw advantage from substantial Chinese quotas in certain products.

Following a decline earlier in the year, knitwear exports accelerated during May.

Exports during September amounted to 7.033 million dozen, a year-on-year rise of 11.1 percent.

From January to September, exports of knitwear amount to 53.397 million dozen, a year-on-year drop of 7.6 percent. September exports were also a record for the month.

In the non-knit apparel segment, exports boosted up during the same period, reaching 56.7 percent to 29.812 million square meters.

Apparel exports from Pakistan show competitiveness in cotton apparel and have been winning market share from China in some products.

Pakistan : Jute & polypropylene makers compete for order

To obtain order of sacks for storing 5 million tons of wheat, jute mills and polypropylene manufactures are in competition.

Purchase of sacks will be an expensive job as about five hundred million of sacks with storing capacity of 100 kilograms each will be required for stocking wheat.

At present, a jute bag of 100 kilogram capacity will cost PRK60 to 70, while polypropylene bags are of PRK20.

However, Government prefers jute bags as they are environment-friendly and could be reused two to three times.

Moreover, those who are against polypropylene bags believe that it deteriorates quality of wheat, while those opposing jute bags claim that they fail to protect wheat from rats leading to loss of four to five percent of soaked wheat per annum.

Experts have urged the Government to conduct a detail study on cost and advantages before purchasing bags for stocking wheat.

At the time of harvest every year, Punjab Government usually procures 3 to 3.5 million tons of wheat.

Similarly, Food Department of Sindh and PASSCO procure one million tons each during this period.

First ever Industrial Policy to be announced by year end

Present government has the honor to formulate first ever Industrial Policy, after a long time, to promote industrial sectors of the economy which will be announced in a couple of months. Mian Manzoor Ahmed Wattoo, Federal Minister for Industries & Production said this while addressing the business community at Islamabad Chamber of Commerce & Industry. He said government was working on first ever comprehensive Industrial Policy for giving boost to this important sector of the economy in consultation with all stakeholders and accommodating their views and suggestions in the new policy. He asked the businessmen to give their proposals to make this policy more industry friendly. On this occasion, he announced that a Marble City will be set up in Islamabad in collaboration with Pakistan Stone Development Company (PASDEC), which will give a boost to local marble industry. He said government was giving priority attention to the promotion of SME sector which was considered engine of growth and a key source for job creation. He said SMEDA would be made more active to accelerate the pace of development of SMEs in the country. Dilating upon energy crisis, Manzoor Wattoo said government was working on different options for meeting the energy requirements of the country including wind, coal & gas etc. He said country was facing a shortfall of 3000 MW while due to fault at Mangla power station; this shortage had gone up to 4100 MW. However, he assured that by end of July, industry will face no loadshedding while country will get rid of this problem by December this year. Speaking on the occasion, Mian Shaukat Masud, President, Islamabad Chamber of Commerce & Industry (ICCI) highlighted business community issues. He said industry was in deep troubles due to multiple factors including power shortage, law & order situation, high interest rates and high production cost etc. He said Ministry of Industries & Production had a key role to play in creating an enabling environment for industrial growth. He said Pakistan, with a consumer market of 170 million people, abundance of raw materials, cheap labor and entrepreneurship, was endowed with all the requisites to climb the ladder of industrialization and all it needed was a conducive Industrial Policy to become a growing industrial country. He said large-scale manufacturing and textile sectors needed special packages for bringing them out of negative growth and government should work out such packages in consultation with business community to put industry on the path of growth. He said Islamabad was badly needed a new Industrial Estate as the existing Industrial Estates had saturated and sought the Minister’s help for accelerating the establishment of I-17 Sector Industrial Estate. He said despite earning good profits, banks were providing no soft terms loans to industrial sector and government should come forward to ensure easy loaning facilities and tax relief measures for struggling industries.

Govt to be meticulous with policies for achieving GDP targets

Government of Pakistan is planning to set the GDP growth target at around 7 percent for the forthcoming fiscal year 2008-09 against the achieved 5.7 percent of the current fiscal year. Low growth of GDP, in this fiscal year, was largely due to decline in key sectors like agriculture; manufacturing sector; exports and foreign direct investment. In an exclusive interview with Fibre2fashion, Nasir Jamal Director General-Media Ministry of Finance, said, “Pakistan needs a sustained macroeconomic stability, financial discipline and consistent and transparent policies for achieving targets for the next fiscal. Efficient management and structural reforms introduced in the recent past have brought about healthy changes in almost all sectors of the economy. A major breakthrough has been achieved in managing the domestic and external debt”. Besides, Mr Nasir also affirmed that the Government has plans to provide relief to major industries from the ongoing inflation and policies will be adopted in the upcoming budget for the same purpose. Additionally, encouragement of industrial clusters, support for technology transfer and facilitation of import of power generating small units are some of the areas to be given priority in the budget. Fiscal and tax incentives for encouraging small medium enterprises (SMEs) will also be encompassed through increased allocation of credit for this sector. In the agriculture sector, measures will be taken to improve cotton production that would help ensure availability of raw cotton on reasonable rates for the ginning industry as well as for the textile industry to increase production and ensure enhanced exports of textile products.

Pakistan : APTMA hails Government’s textile initiatives

Prime Minister Shaukat Aziz has assured the delegation of All Pakistan Textile Mills Association (APTMA) of Government commitment of helping the industry in improving its competitiveness and productivity.

Aziz also stressed on the need to bring in innovation and research so that the industry could hold a big share in the world textile market.

He urged the private sector to benefit from the Government policies of liberalization, privatization and deregulation along with the procedural transparency and policy continuation which have boosted the economy and have created a positive atmosphere for the private sector.

Aziz informed the delegation that Government had launched 'Clean Cotton Project' to bring the cotton industry at par with the international acceptable standards even as he hailed the private sector for using new technology.

The APTMA delegation on its part thanked the Government for its favourable policies and continuous commitment to develop and upgrade textile sector in Pakistan. Textile Minister, Mushtaq Ali Cheema and other senior officials were also present during the meeting.

Pakistan : Govt plans policies to boost textile industry

Mushtaq Ali Cheema, Federal Minister for Textile Industry, while attending a press meet on June 4, said that Government has decided to enforce policies to boost the textile industry’s export.

In order to face competition in the international market efficiently, the industry need to pay heed towards the development of skill, enhance productivity, manufacturing cost reduction.

The Textile Minister emphasized that the textile industry should organize itself and attract big investors or orders from abroad, so that the weaving sector, which is performing below its capacity, can flourish.

Cheema revealed that textile policies would be approved by the the first week of July.

According to the Minister, Government plans to introduce a complete policy for this industry so that all the sectors and sub-sectors should work in unison.

The Textile Ministry plans to establish garment cities within in next two to three years. The one in Karachi would start in Pakistan Textile City Limited and in Lahore it would be set up in Sundar Industrial State.

Textile exporters assured of implementing policy, LCCI

The Chairman Senate Standing Committee on Textiles Gul Mohammad Lot has said that the government would ensure implementation of the Textile Policy in letter and spirit as the textiles is the biggest export-earning sector. He was speaking at the Lahore Chamber of Commerce and Industry on Wednesday. LCCI Vice President Faisal Iqbal Sheikh, former Chairman APTMA Punjab Akber Sheikh and Mohammad Ayub Skeikh also spoke on the occasion. The Chairman said that the steps were being taken to help strengthen textile sector, boost exports and create new jobs besides shoring up textile sector and fetching the much-needed foreign exchange. He said such measures would help capital-starved exporters to increase their exports, and help revert the declining trend in exports. He said that the government was taking all measures to remove regulatory bottlenecks in market access and improving information and communications technology. Gul Mohammad Lot said that the present government was also concentrating on bringing down the rate of markup and inflation to the single digit for the expeditious revival of the industrial sector. He, however, expressed his concern over the shortage of skilled labour and sought the private sector’s help to overcome the shortage. Speaking on the occasion, the LCCI Vice President Faisal Iqbal Sheikh said that for the past several years Pakistan had been multiple internal and external challenges and the only way to get out of this critical state of affairs is to regain the economic stability which can be achieved through the revival of the industrial sector, especially the export-oriented textile sector. The textile industry contributes 8.5% of the GDP and employs 38% of the workforce in the manufacturing sector. It is responsible for about 55% of total exports. Export of textile products has reached $ 10.62 billion in the year 2007-08 from $ 5.5 billion in the year 2003-04 i.e. an increase of $ 5.12 billion in value term or by 93% and it still have the potential to beat this rate of growth in future. The way international trade is evolving is neither free nor fair. There is continued downward pressure of unit prices of textile goods, while the raw material prices and cost of doing business are increasing drastically. Even though, Textile Industry of Pakistan is indeed passing through a very crucial juncture due to the prevailing socio-economic and political climate. The Textile sector is exposed to extreme competition after the phasing out of quota besides facing resistance from developed countries. To increase competitiveness and quality of products, textile industry requires investment in technology for meeting the new challenges. He said that over the last few years the textile sector had invested about $ 6.0 billion in modernization and higher value addition, but due to continuous rise in cost of doing business resulting from enhancement in the cotton prices, utilities, inflation and bank refinancing rate on exports, Pakistan is becoming uncompetitive and loosing share in the international market. He said that government needs to plan a strategy to identify and solve issues with a long-term perspective to meet the challenging tasks of the textile sector.

Lahore Chamber of Commerce and Industry

Pakistan : RMG, knitwear, leather garment exports down in July, says FBS

According to the provisional figures compiled by the Federal Bureau of Statistics (FBS), exports from Pakistan during July, 2005 amounted to Rs.75,841 million (provisional) as against Rs.91,954 million (provisional) in June, 2005 and Rs.68,987 million during July, 2004 showing a decrease of 17.52% over June,2005 but an increase of 9.94% over July, 2004.

In terms of US dollars the exports decreased by 17.46% in July, 2005 $ 1,272,008 thousands (provisional) when compared with June, 2005 $ 1,541,117 thousands (provisional) but increased by 7.45% as compared to July, 2004 $ 1,183,766 thousands.

Main commodities of exports during July, 2005 were Cotton cloth (Rs.12,401 million), Knitwear (Rs.8,958 million), Bedwear (Rs.7,974 million), Readymade garments (Rs.6,827 million), Cotton yarn (Rs.5,423 million), Rice basmati (Rs.2,365 million), Towels (Rs.2,150 million), Madeup articles (including Other textile) (Rs.2,046 million), Leather garments (Rs.1,710 million) and Rice others (Rs.1,681 million).

The increase(+) / decrease(-) recorded in main commodities exported during July, 2005 over June, 2005 and July, 2004 is given below:-

Gas load shedding forces textile units to suspend work

Gas load shedding for more than two days a week has forced around 200 units in the north regions to suspend their operations. This distressing situation led to representatives from All Pakistan Textile Manufacturers Association (APTMA) to rush to the Ministry of Petroleum and Natural Resources for assistance.

The industry in Lahore-I cluster as well as the industrial units in the region from Islamabad to Multan have been denied gas availability. Industry sources informed that, according to the gas load management program 2009-10, framed in a Cabinet Committee meeting on November 3, gas supply to the industry is to be done for five days in a week.

However, the disruption in gas supplies beyond two days in a week is being resorted to by the Sui Northern Gas Pipelines Limited (SNGPL), which is impacting industry’s export oriented production, informed sources.

Moreover, the committee also decided to supply additional gas to the SNGPL network from various sources, including diversion of 220 mmcfd of gas from the Sui Southern Gas Company (SSGC) sources. But, this availability of gas to the SNGPL from SSGC sources has not been made available to meet SNGPL’s increasing gas scarcity in winter.

The Chairman of All Pakistan Textile Mills Association (APTMA), Punjab will urge the concerned ministries to restore gas supply to the industry as per Cabinet Committee’s decision. The situation can acquire drastic mode if the government failed to act immediately, added the Chairman.

Restrict export of raw materials- NA Committee

National Assembly Standing Committee on Commerce led by its Chairman Engineer Khurram Dastgir Khan asked the government, to ensure the availability of yarn in the country as well as to restrict its export along with the export of raw cotton, in a meeting at Parliament House. The committee reprimanded the officials of Ministry of Commerce for attending the meeting without doing adequate groundwork with regards to agenda of Trade Organization Ordinance.

As per Mr. Dastgir, rampant export of raw materials and low value-added products reflects government’s irresponsibility towards protecting country’s competitive advantage. Ban on exports of yarn could salvage domestic industries, as lot of workers and manufacturers associated with the industry across the country have been impacted adversely due to ill-advised government policy, he added.

Local industries are already facing challenges due to load-shedding, while the rising prices and unavailability of raw materials are threatening these industries further, he added. Export of raw cotton and cotton yarn witnessed steep surge of 212 percent and 84 percent respectively, during last year. Prices of raw and semi-raw materials in domestic markets are reaching at international level, which are distressing downstream value adding manufacturers.

In addition to this, the Committee recommended the government to balance the trade policy for growers, informed Mr. Dastgir.

Pakistan-Textile Industry; Roundup: Pakistan's Government Solves Textile Crisis

Textile industry, the backbone of Pakistan's economy, accounts for 8 percent of the country's gross national product, 42 percent of total employment in large scale manufacturing and more than 60 percent of the country's total export receipts.
In the last three years, the textile industry confronted the most serious recession in decades.
The sharp fall in cotton output from 1991 to 1994, caused by cotton virus and floods, led to dramatic increases in cotton prices in the country.
The textile industry was hit hard by increasing power rates and high interest rates on commercial loans following ...

APTMA opposes imposition of anti-dumping duty on PSF

Recently, the government had slapped an anti-dumping duty on imports of Polyester Staple Fibre (PSF) from China. The textile mills of the country are up in arms against the decision taken by the National Tariff Commission
The textile mills, under the banner of the All Pakistan Textile Mills Association (APTMA) have said that this decision will lead to a cartel among PSF producers in the country and will render the textile products uncompetitive in global markets.
They allege that the domestic PSF manufacturers have already hiked the prices by 10 percent and are delaying deliveries to the textile mills. They add by saying that the local PSF producers already are protected by a 4.5 percent import duty and 8.5 percent expenses incurred in importing the fibre.

Only spinning sub-sector eligible for loan swap scheme of SBP

The State Bank of Pakistan has provided a reprieve to the export oriented industries; by allowing them a one time opportunity to swap and refinance their outstanding loans availed to import or purchase plant, machinery and equipment with SBP’s Long Term Facility Scheme (LTFS).

As per the circular issued by the Apex bank, only those long term loans will be eligible for the swap, which had been disbursed by the banks between January 2005 and March 2009, but the scheme excludes the highest export revenue generator; textiles and garments.
This one time opportunity scheme will stay open from April 21 to June 30, 2009. Only 50 percent of the loan will be eligible for refinancing while the rest will stay concurrent with the lending banks and also excludes loans which have been declared non-performing under SBP guidelines.
Meanwhile, the SBP released a second circular, which included various sub-sectors from the spinning industries, making them eligible for the LTFS loans. The sub-sectors include doubling, twisting, combing, yarn dyeing, etc.t

Govt releases first tranche under textile policy

The Federal Textile Minister, Rana Muhammad Farooq Saeed Khan, who chaired the 1st meeting of Textile Policy Implementation Liaison Committee, informed that the government has allocated Rs 10 billion for various initiatives under the textile policy for the current fiscal year.
He added by saying that out of the Rs 10 billion, Rs 5 billion had already been released to the State Bank of Pakistan and that he would ensure that the textile policy would be implemented in its true spirit for the development of textile sector in the country.
Dr. Waqar Masood apprised the participants, who represented all the sub-sectors of the textile industry about the progress on implementation of the policy in detail and that notifications regarding important initiatives of the policy have already been issued.

About the Textile Industry of Pakistan

Pakistan is the fourth largest cotton producer in the world. Because of its plentiful, indigenous cotton supply, the textile industry is central to the Pakistani economy and is both a source of employment and a source of exports. Pakistan's industrialization began in the 1950s with the textile industry at its center. Today, textiles account for 38 percent of total manufacturing and 8 percent of GDP. The textile industry employs almost 40 percent of the industrial workforce. Despite the critical role textiles play in the economy, most textile manufacturers are cottage or small-scale industries. Pakistan relies on outside engineering and manufacturing expertise and must purchase most of its equipment abroad. Recognizing the importance of the textile industry to the nation's economy, the Pakistani government began taking steps in 2005 to rebuild the competitiveness of this critical industry.

1. The Pakistani textile industry depends on domestic agriculture to supply its raw materials, thus the success of the cotton crop is critical to the health of the textile industry. Cotton accounts for 14 percent of land under cultivation in Pakistan. Pakistan has suffered from a number of cotton failures over the years, beginning in the early 1990s. These crop failures drove up the price of cotton, and this coupled with a market recession and tightened finance regulations led to a weakened textile industry.